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Answer: Guaranteeing that clients will not take a loss on an investment
**A is correct.** Guaranteeing to clients that they will not take a loss is a violation of the rule that GARP members shall be diligent about not overstating the accuracy or certainty of results or conclusions. **B is incorrect.** This is not a violation. In fact, GARP Code of Conduct states that "GARP members must endeavor, and encourage others, to operate at the highest level of professional skill." **C is incorrect.** This is not a violation. This behavior complies with the rule that "GARP Members issuing any communications on behalf of their firm will ensure that the communications are clear, appropriate to the circumstances and their intended audience, and satisfy applicable standards of conduct." **D is incorrect.** This is not a violation. This behavior complies with the rule that GARP members "shall understand the needs and complexity of their employer or client, and should provide appropriate and suitable risk management services and advice."
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A newly hired financial advisor at a wealth management firm is a certified FRM. The advisor is reviewing the new employee handbook, which describes responsibilities for the position, suggested approaches to use when dealing with clients, and a typical day as a financial advisor. Which of the following actions if taken by the advisor would be a violation of the GARP Code of Conduct?
A
Guaranteeing that clients will not take a loss on an investment
B
Assuring clients that wealth managers will perform to the best of their abilities
C
Promising clients that they will have access to annual performance reports
D
Ensuring that clients' risk preferences are taken into consideration when selecting investments for their portfolios
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